Correlation Between Cameco Corp and EnCore Energy
Can any of the company-specific risk be diversified away by investing in both Cameco Corp and EnCore Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cameco Corp and EnCore Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cameco Corp and enCore Energy Corp, you can compare the effects of market volatilities on Cameco Corp and EnCore Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cameco Corp with a short position of EnCore Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cameco Corp and EnCore Energy.
Diversification Opportunities for Cameco Corp and EnCore Energy
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cameco and EnCore is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cameco Corp and enCore Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enCore Energy Corp and Cameco Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cameco Corp are associated (or correlated) with EnCore Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enCore Energy Corp has no effect on the direction of Cameco Corp i.e., Cameco Corp and EnCore Energy go up and down completely randomly.
Pair Corralation between Cameco Corp and EnCore Energy
Considering the 90-day investment horizon Cameco Corp is expected to generate 0.9 times more return on investment than EnCore Energy. However, Cameco Corp is 1.11 times less risky than EnCore Energy. It trades about 0.1 of its potential returns per unit of risk. enCore Energy Corp is currently generating about -0.08 per unit of risk. If you would invest 5,517 in Cameco Corp on August 28, 2024 and sell it today you would earn a total of 294.00 from holding Cameco Corp or generate 5.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cameco Corp vs. enCore Energy Corp
Performance |
Timeline |
Cameco Corp |
enCore Energy Corp |
Cameco Corp and EnCore Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cameco Corp and EnCore Energy
The main advantage of trading using opposite Cameco Corp and EnCore Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cameco Corp position performs unexpectedly, EnCore Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in EnCore Energy will offset losses from the drop in EnCore Energy's long position.Cameco Corp vs. Energy Fuels | Cameco Corp vs. NexGen Energy | Cameco Corp vs. Uranium Energy Corp | Cameco Corp vs. Ur Energy |
EnCore Energy vs. Cameco Corp | EnCore Energy vs. Denison Mines Corp | EnCore Energy vs. Centrus Energy | EnCore Energy vs. NexGen Energy |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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